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Exhibit 99.2
FIRST AMENDMENT TO RIGHTS AGREEMENT
FIRST AMENDMENT TO RIGHTS AGREEMENT, dated as of July 23, 1999 (the
"Amendment"), between VERITY, INC., a Delaware corporation (the "Company"), and
BANKBOSTON, N.A., a national banking association (formally First National Bank
of Boston, a national banking association) (the "Rights Agent").
RECITALS
A. The Company and the Rights Agent entered into that certain Rights
Agreement, dated as of September 18, 1996 (the "Rights Agreement"), which
governs the terms and conditions of a dividend of preferred share purchase
rights to the holders of the Company's Common Stock (capitalized terms used
herein and not otherwise defined are given the meanings assigned them in the
Rights Agreement).
B. The Company and the Rights Agent desire to amend the Rights Agreement
as herein set forth.
AGREEMENT
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
1. Section 1(a) is amended to read in its entirety as follows:
"(a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined)
of such Person, without the prior approval of the Board of Directors, shall
be the Beneficial Owner (as such term is hereinafter defined) of fifteen
percent (15%) or more of the outstanding Common Stock; provided, however,
that in no event shall a Person who or which, together with all Affiliates
and Associates of such Person, is the Beneficial Owner of less than 15% of
the Company's outstanding shares of Common Stock, become an Acquiring
Person solely as a result of a reduction of the number of shares of
outstanding Common Stock, including repurchases of outstanding shares of
Common Stock by the Company, which reduction increases the percentage of
outstanding shares of Common Stock beneficially owned by such Person,
provided, however, that if a Person shall become the Beneficial Owner of
15% or more of the Company's outstanding shares of Common Stock then
outstanding solely by reason of a reduction of the number of shares of
outstanding Common Stock, and shall thereafter become the Beneficial Owner
of any additional shares of Common Stock of the Company, then such Person
shall be deemed to be an "Acquiring Person" unless upon the consummation of
the acquisition of such additional shares of Common Stock such person does
not own fifteen percent (15%) or more of the shares of Common Stock then
outstanding, and provided further, that an Acquiring Person shall not
include an Exempt Person (as such term is hereinafter defined).
Notwithstanding the foregoing, if the Board
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of Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), has become such inadvertently
(including, without limitation, because (i) such Person was unaware that it
beneficially owned a percentage of Common Stock that would otherwise cause
such Person to be an "Acquiring Person" or (ii) such Person was aware of
the extent of its Beneficial Ownership but had no actual knowledge of the
consequences of such Beneficial Ownership under this Agreement) and without
any intention of changing or influencing control of the Company, and such
Person divests as promptly as practicable a sufficient number of shares of
Common Stock so that such Person would no longer be an "Acquiring Person,"
as defined pursuant to the foregoing provisions of this paragraph (a), then
such Person shall not be deemed to be or to have become an "Acquiring
Person" for any purposes of this Agreement."
2. Section 1(t) is amended to read in its entirety as follows:
"(t) [Reserved]"
3. Section 2 is amended to read in its entirety as follows:
2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights
Agents as it may deem necessary or desirable, upon ten (10) days'
prior written notice to the Rights Agent. The Rights Agent shall have
no duty to supervise, and shall in no event be liable for, the acts or
omissions of any such Co-Rights Agent. In the event the Company
appoints one or more Co-Rights Agents, the respective duties of the
Rights Agents and any Co-Rights Agents shall be as the Company shall
determine.
4. Section 4(a) is amended to read in its entirety as follows:
"(a) The Right Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof), when,
as and if issued, shall be substantially in the form set forth in
Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed
thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Rights Agreement, or as may
be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange
on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Sections 11, 13 and 22 hereof, the
Right Certificates evidencing the Rights issued on the Record Date
whenever such certificates are issued, shall be dated as of the Record
Date and the Right Certificates evidencing Rights to holders of record
of Common Stock issued after the Record Date shall be dated as of the
Record Date but shall also be dated to reflect the date of issuance of
such Right Certificate. On their face, Right Certificates shall
entitle the holders thereof to purchase, for each Right, one
one-
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hundredth of a share of Preferred Stock, or other securities or
property as provided herein, as the same may from time to time be
adjusted as provided herein, at the price per share of $300.00, as the
same may from time to time be adjusted as provided herein (the
"Purchase Price")."
5. The first paragraph of Exhibit B to the Rights Agreement (Form of
Right Certificate) is amended to read in its entirety as follows:
"This certifies that , or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of September 18, 1996, as amended
("Rights Agreement"), between Verity, Inc., a Delaware corporation
("Company"), and First National Bank of Boston ("Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as
such term is defined in the Rights Agreement) and prior to 5:00 p.m.
(New York time) on September 17, 2006, at the principal office of the
Rights Agent, or its successors as Rights Agent, designated for such
purposes, one one-hundredth of a fully paid and nonassessable share of
Series A Preferred Stock of the Company ("Preferred Stock") at a
purchase price of $300.00 per one one-hundredth of a share, as the
same may from time to time be adjusted in accordance with the Rights
Agreement ("Purchase Price"),upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to such terms in the Rights Agreement."
6. The section of Exhibit C to the Rights Agreement (Summary of terms of
Rights Agreement) entitled "Exercisability" is amended to read in its entirety
as follows:
"EXERCISABILITY: Rights become exercisable on the earlier of: (i)
the tenth day following the date of public announcement by the Company
or by any person or group (an "Acquiring Person") that such person or
group has acquired beneficial ownership of 15% or more of the
Company's outstanding Common Stock, or (ii) the tenth business day
(unless extended by the Board prior to the time a person becomes an
Acquiring Person) following the commencement, or announcement of an
intention to commence, by any person or group of a tender or exchange
offer which would result in such person owning 15% or more of the
outstanding Common Stock of the Company (the earlier of such dates is
referred to as the "Distribution Date"), provided that an Acquiring
Person does not include an Exempt Person or a Grandfathered Person (as
such terms are defined in the Rights Agreement). Rights will trade
separately from the Common Stock once the Rights become exercisable."
7. The section of Exhibit C to the Rights Agreement (Summary of terms of
Rights Agreement) entitled "Exercise Price" is amended to read in its entirety
as follows:
"EXERCISE PRICE: $300.00 per share, which is the amount that in
the judgment of the Board of Directors represents the long-term value
of the Common Stock over the term of the Rights Agreement (the
"Exercise Price")."
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8. Except as expressly set forth herein, all of the terms and conditions
set forth in the Rights Agreement shall remain in full force and effect.
9. This Amendment shall be deemed to be a contract made under the laws of
the State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
10. This Amendment may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, parties whereto have caused this Amendment to be duly
executed and their seals attested, all as of the day and year first above
written.
ATTEST: VERITY, INC.
/s/ Xxxxxxx X. Xxxxx /s/ Xxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxx Xxxxx X. Xxxxxxxxx
Secretary Vice President, Finance and Administration
ATTEST: BANKBOSTON, N.A.
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxxxxx Xxxxxxxx
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Title: Account Manager Title: Managing Director
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