VeriSign (VRSN)

Internal Revenue Code Section 409A Disclosure Update

In a Form 8-K filed on January 4, 2007, the Company reported that certain of the Company’s Section 16 reporting persons elected to increase the exercise price of certain unexercised stock option grants that were subject Section 409A of the Internal Revenue Code (“Section 409A”). Section 409A imposes an additional tax and interest charge on deferred income of individual income taxpayers who were granted stock options that were unvested as of December 31, 2004 and have an exercise price of less than the fair market value of the stock on the date of grant (“Affected Options). This additional tax and interest charge on deferred income is avoided if the taxpayer agrees to adjust the options’ exercise price to reflect the fair market value at the time the option was granted (as such measurement date is determined for financial reporting purposes). For Section 16 reporting persons, Internal Revenue Service rules require that this adjustment in the exercise price be made on or before December 31, 2006 in order to remove the Affected Options from the scope of Section 409A.

The Company’s January 4, 2007 8-K also reported that none of the Company’s current directors holds Affected Options. The Company has determined that two current directors hold Affected Options. Neither director elected to increase the exercise price before December 31, 2006.

The Company intends to file a Form 8-K/A amending the Form 8-K filed on January 4, 2007.