VeriSign (VRSN)

Note 9. Calculation of Net Income Per Share

Basic net income per share is computed by dividing net income (numerator) by the weighted-average number of shares of common stock outstanding (denominator) during the period. Diluted net income per share gives effect to dilutive common equivalent shares, including unvested stock options, employee stock purchases, unvested restricted stock and restricted stock units, and warrants using the treasury stock method.

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The following table represents the computation of basic and diluted net income per share:

For the three months ended March 31, 2006 and 2005, VeriSign excluded 17,930,882 and 9,924,135 weighted-average stock options, respectively, with an exercise price that exceeded the average fair market value of VeriSign’s common stock for the period with a weighted-average exercise price of $46.61 and $75.05, respectively, because their effect would have been anti-dilutive. Weighted-average potential common shares do not include stock options with an exercise price that exceeded the average fair market value of VeriSign’s common stock for the period.

Note 11. Calculation of Net Income Per Share

Basic net income per share is computed by dividing net income (numerator) by the weighted-average number of shares of common stock outstanding (denominator) during the period. Diluted net income per share gives effect to dilutive common equivalent shares, including unvested stock options, using the treasury stock method.

The following table represents the computation of basic and diluted net income per share:

For the three and nine months ended September 30, 2005, VeriSign excluded 16,003,122 and 10,092,284 weighted-average stock options, respectively, with an exercise price that exceeded the average fair market value of VeriSign’s common stock for the period with a weighted-average exercise price of $51.93 and $70.06, respectively, because their effect would have been anti-dilutive. For the three and nine months ended September 30, 2004, VeriSign excluded 11,937,233 and 12,651,522 weighted-average stock options, respectively, with an exercise price that exceeded the average fair market value of VeriSign’s common stock for the period with a weighted-average exercise price of $68.90 and $68.65 for the respective periods. Weighted-average potential common shares do not include stock options with an exercise price that exceeded the average fair market value of VeriSign’s common stock for the period.

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VERISIGN, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)