VeriSign (VRSN)

Chief Executive Officer Compensation

In establishing the compensation level of Mr. Sclavos, VeriSign’s Chief Executive Officer, for fiscal 2005 the Committee applied the compensation philosophy described above and considered market data provided by an independent consultant. In February 2005, the Committee set Mr. Sclavos’ base salary at $825,000. In August 2005, the Committee increased Mr. Sclavos’ base salary to $900,000 in order to bring his salary within an appropriate range above the median indicated by the available market data. His target bonus opportunity for 2005 was 110% of base salary up to a maximum of 200% of base salary. Based on his performance in achieving

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specified corporate goals and individual and team objectives in 2005, Mr. Sclavos received a bonus of $1,160,027.47 in March 2006, which represents approximately 117% of his target bonus. In addition, the Compensation Committee also awarded Mr. Sclavos long-term incentive compensation in November 2005 of 385,300 stock options and 86,000 restricted stock units that vest over four year as described above.

Chief Executive Officer Compensation

Mr. Sclavos’ base salary, target bonus, bonus paid and long-term incentive awards for 2004 were determined by us in a manner consistent with the factors described above for all executive officers. Mr. Sclavos’ base salary for 2004 was set at the annual rate of $750,000; he was eligible for a target bonus of $750,000, up to a maximum of $1,500,000. Mr. Sclavos’ long-term incentive award for 2004 consisted of a grant of options to purchase 650,000 shares of VeriSign common stock and 125,000 restricted stock units. In order to more effectively align these awards with the maximization of long-term shareholder value, a majority of the options were granted at exercise prices above fair market value, while most of the restricted stock units vest in the last two years of the four-year vesting period. Specifically, options with respect to 400,000 shares were granted at an exercise price of 5% above the fair market value of our common stock on the date of grant, and 100,000 of the restricted stock units will vest over a four-year period as follows: 10% on the first anniversary, 20% on the second anniversary, 30% on the third anniversary, and 40% on the fourth anniversary of the date of grant. Mr. Sclavos was paid a bonus in 2004 in accordance with VeriSign’s regular bonus plan based on VeriSign’s actual performance in fiscal year 2003 in achieving corporate financial and other targets described above as compared to planned results for these criteria. We also considered Mr. Sclavos’ achievement of his individual objectives. An important aspect of VeriSign’s continued success was, and will continue to be, Mr. Sclavos’ leadership in developing and articulating the long-term strategic direction of VeriSign, as well as his continued attention to the development of the appropriate senior management team to support and execute that strategy. Finally, in considering competitive compensation practices with respect to Mr. Sclavos’ total compensation, we paid particular attention to the compensation practices of competitor companies and sought to assure that Mr. Sclavos’ total compensation was appropriate relative to the total compensation paid to the chief executive officers at similarly situated companies.

We have reviewed all components of Mr. Sclavos’ and our executive officers’ compensation, including salary, bonus, and long-term equity compensation. Based on this review, the compensation committee finds Mr. Sclavos’ and our executive officers’ total compensation to be reasonable.